China’s real estate market is starting to look a lot like America’s 2008 meltdown, and it could shake the global economy.
Home sales from China’s top 100 developers plunged 24% in July from a year earlier, the sharpest drop in 10 months, according to Bloomberg data.
Month over month, sales tanked 38%, which the steepest decline this year.
“China’s 2008 is happening now,” warned The Kobeissi Letter, comparing the slowdown to the U.S. housing collapse that sparked a global financial crisis.
China's real estate downturn is worsening:
undefined The Kobeissi Letter (@KobeissiLetter) August 2, 2025
New-home sales by China's 100 largest developers fell -24% YoY in July, the largest decline in 10 months.
Month-over-month sales fell -38%, marking the steepest monthly drop this year.
This comes after June marked the biggest monthly… pic.twitter.com/YRIbzdLPhx
It may get worse before it gets better. Goldman Sachs expects demand for new homes in Chinese cities to stay about 75% below its 2017 peak for years, dimming hopes for a rebound.
The fallout isn’t just about real estate. Lance Roberts of Real Investment Advice explains that for decades, U.S. corporations benefited from China’s rise, outsourcing labor to keep costs low while selling goods into its booming middle class.
That dynamic let companies “export inflation” and “import deflation,” fueling earnings growth.“As that engine falters, U.S. multinational earnings will increasingly come under pressure,” Roberts said.
And while American companies aren’t deeply exposed to China’s real estate market, a bigger crash could worsen already strained trade ties between the two countries.
Bad timing for another 2008-like property crash
This real estate unraveling is hitting just as trade tensions reignite.
Last week, the White House rolled out new tariffs of 10% to 41% on major trading partners. Talks with Beijing haven’t moved the needle, and a fragile tariff truce could expire on Aug. 12.
The Kiel Institute says the ongoing trade fight will likely spark more inflation and drive U.S. exports down 17%, while China’s short-term pain looks less severe.
Signs of strain are already showing in the U.S. economy. The Bureau of Labor Statistics reported weaker hiring in July, with job growth for the past two months revised lower.
Inflation is creeping up again too. For example, core Personal Consumption Expenditures (PCE) — the Fed’s favorite inflation measure — ticked higher in June.
For investors, that means a more unpredictable second half of the year, with China risking a 2008-style crash, trade fights flaring up again, and early warning signs flashing in the U.S. economy.
It’s shaping up to be perfect macro storm that could keep global markets on edge for months.
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